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The stated purpose of Measure 86 is to use the moneys in the Oregon Student Opportunity Fund for the “exclusive benefit of Oregon students pursuing post-secondary education.” I previously argued that it was fiscal insanity to issue hundreds of millions in bonds, backed by the full faith and credit of the state and its taxpayers, to pay, all be it indirectly, operating expenses. In this article, I argue that tuition support for students will not in fact help students; it will only further inflate tuition.
Nor will the Kitzhaber/Wheeler plan improve the quality of college graduates or their ability to get and hold jobs. Today, one cannot be a mechanic, a nursing assistant, a welder, or a worker on an assembly line without basic numeracy and literacy skill – and without having acquired the life skills needed to hold a job.
But according to the American College Testing organization, only 30% of Oregon students are ready even for a two year college, and so colleges must now teach what should have been taught in K-12. Until K-12 is improved, college graduates will be less and less able to function in a modern economy.
Let’s look at the history.
Sixty-five years ago, After World War II, the GI bill funded college for returning soldiers. The funding was one of the ways in which a grateful nation paid its military for their service. It was not an entitlement. The students, who as children of the Depression tended to be fiscally conservative, found jobs and created jobs in the burgeoning economy. They used their education to make better lives for themselves, their children, and their nation.
As is the case with many well-meaning and initially successful programs, mission creep set in. Over the decades increasingly massive federal subsidies to many millions of students have inflated college costs. Since 1978, tuition and fees have increased at ten times the rate of inflation dwarfing the four times the rate of inflation rise in medical costs.
Although medical care has improved, and Americans are living longer, healthier, and more pain-free lives, college education has not significantly improved. Today, many college graduates are not getting jobs and they are not creating jobs.
Even in the past 10 years—much of it during the recession—college tuition and costs have increased much faster than other costs.
Where does the tuition money go? How is it being spent? Let’s look at the University of California numbers.
In the University of California system there are more administrators (189,116) than undergraduates (184,562) and ten times as many administrators as instructors. The overwhelming majority of those non-faculty staff may be working hard but in government bureaucracies work expands to fill the funds allotted to it.
The students and their parents are paying most of the bill and the other tax payers are picking up the rest.
Private colleges have also increased administrative and staff, but are somewhat more constrained in what they can spend. Years ago private banks and colleges had some skin in the student loan game since they had to swallow losses when students defaulted and went bankrupt. These colleges had more incentive to cut costs and to issue loans sparingly. That is no longer the case. Once the federal government guaranteed the loans, students no longer had the option of bankruptcy.
Senator Merkley, among others, recently urged President Obama to take over all school loans and thus cut out the evil “middle man.” Cutting out the middle man didn’t reduce costs, however, since the government spends far more than the middle man on administering the loans and the loan default rates have increased.
The actual costs of a college education must be reduced, but as long as tuition is heavily subsidized there is little incentive for universities to cut costs. In fact, Oregon State Treasurer Ted Wheeler, in the video below, shows one way costs might indeed be cut, but given the Kitzhaber/Wheeler plan, cost-cutting will not happen in Oregon. We will have even more administrators and less money spent in the classroom.
It’s a vicious circle. Students are incurring more and more debt but not buying anything of value with that debt. The tuition money is going directly from the student to the public employee unions and the public employee unions are funding the Democratic Party in order to elect governors and legislators who will increase pay-out to those unions by raising taxes and raising tuition.
An earlier version of this story was originally published in the U-Choose Education Bulletin.
Featured Image: Shutterstock.com
Tags: college, Governor Kitzhaber, Measure 86, students, Ted Wheeler
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